The UK’s planning system is under performing and in its current form will not allow the government to meet its ambition of building 300,000 new homes each year, the government’s main watchdog has said.
The National Audit Office (NAO) slammed what it called “flawed methodology” in assessing the number of homes required and failures in ensuring that developers contribute to infrastructure investment, and called on the government to implement new planning policies to bring about change.
The criticisms were included in a report published today looking at the country’s planning system and whether it was fit for purpose to meet the government’s current ambition of delivering 300,000 homes a year by the mid-2020s.
The report questioned the government’s current system for assessing how many homes were needed in local authority areas, saying it had weaknesses and needed to be revised for it to be consistent with the government’s aim of 300,000 homes.
It found the government’s current methodology reduced the need for new homes in five out of the nine UK regions, which it said could hamper local authorities’ plans to regenerate areas.
The report was also highly critical of the government’s approach to ensuring that local authorities had local plans set up.
As part of the Planning Act 2004, local authorities are required to produce a local plan that sets out local planning policy and identifies how land should be used.
The NAO found that only 44% of all local authorities currently had an up-to-date local plan in place, despite it being a legislative requirement.
Of the 338 local authorities which should be covered by a local plan, 143 had a plan that was more than five years old, while 46 had no plan in place at all.
Despite the lack of local plans, the NAO said the government was slow in reprimanding those authorities without a plan, having challenged only 15 councils with out-of-date plans as of November 2018.
Skills shortages in local authority planning departments and a lack of of funding for these teams were also raised as concerns. The report found that the amount of money spent on planning functions, such as planning application teams, had dropped by 15% in real terms.
It said that while the department reported that local authorities were processing applications within timescales, it believed that this may reflect a greater use of time extensions rather than greater efficiency.
The government’s central planning authority, the Planning Inspectorate, was found to be underperforming by the NAO, with the time taken to determine a planning appeal taking 38 weeks now, compared with just 30 weeks five years ago.
Meg Hillier, chair of the Public Accounts Committee, said that the government needed to fix the problems to make sure the right number of homes were built.
She said: “The planning system is not working well enough to support the government’s target to deliver 300,000 new homes.
“There aren’t enough experienced planning staff, appeals take too long and local authorities are not maximising contributions from developers to pay for local infrastructure.”
The report said that the current mechanism to ensure developers were contributing to infrastructure investments was not working effectively, and under the current system developers were able to renegotiate previously agreed contributions to protect their profit margins.
The report found that despite house prices increasing by 31% since 2011/12 and developers’ margins growing, there had been a slight decrease in the amount these companies were contributing to infrastructure investments.
Housing minister Kit Malthouse said: “I recognise the challenges identified by the NAO, and the simple truth is over the past three decades, governments of all stripes have built too few homes of all types.
“We’re conducting independent reviews on build-out rates and planning inquiries. And through multibillion-pound funding, planning reforms and giving councils the freedom to borrow more to build homes, we’re helping to make the housing market work for everyone.”